A new tax reform blueprint from House Republicans remains silent on the low-income housing tax credit (LIHTC).
The plan, part of the Republicans’ “A Better Way” agenda, was prepared by the House Tax Reform Task Force led by House Ways and Means Committee Chairman Kevin Brady (R-Texas).
“Considering the widespread need for affordable housing and the consensus support that exists for the LIHTC among elected officials at every level of government, it is disappointing that House Republicans did not include the LIHTC in their tax reform blueprint,” says David Gasson, executive director of the Housing Advisory Group and vice president at Boston Capital. “For 30 years the LIHTC has demonstrated the effectiveness and efficiency of this quintessential public/private partnership to construct and rehabilitate affordable housing. We will continue to work with members of both parties to convince them that the LIHTC is essential to their constituents that rely on and need quality affordable housing.”
The proposal was especially disappointing considering that the LIHTC program was one of the only tax preferences included in a discussion plan released by former Ways and Means Committee Chairman Dave Camp in 2014. The housing credit is widely considered the nation’s most successful program for creating and preserving affordable housing.
Although LIHTCs and New Markets Tax Credits are not specifically mentioned in the blueprint, it's worth noting that the proposal is generally critical of special-interest deductions and credits. It says "this Blueprint generally will eliminate special-interest deductions and credits in favor of providing lower tax rates for all businesses and eliminating taxes on business investment."
“At this point we are still not clear why housing credits and bonds were not specifically mentioned, but we do know the blueprint is not done yet,” says Bob Moss, principal and national director of governmental affairs at CohnReznick. “Early reports last week stated that we would be included, so Friday’s release surprised us. Chairman Brady is working to compile a list of preferred expenditures and has made it clear that the tax plan is not yet finished. Now is the time to communicate to House Republican leadership the importance of affordable housing and the inclusion of the LIHTC.”
The absence of the program in the tax reform proposal means there’s work ahead for the industry.
“The tax reform blueprint’s silence on the housing credit underscores the need for advocacy over the coming months to make sure that the housing credit is included in any tax reform bill the House puts forward in 2017,” says Emily Cadik, public policy director at Enterprise Community Partners. “Although the program has always had strong bipartisan support, we can’t take it for granted that the housing credit will always be part of the tax code. As Congress begins the process of translating these guiding principles into draft legislation, it is our job as an industry to convey that the housing credit is indispensable.”